INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART VI - COLLECTION AND RECOVERY OF TAX  

Division 3 - Provisional tax  

Subdivision A - General provisions  

SECTION 221YDB   LIABILITY WHERE INCOME UNDER-ESTIMATED OR WHERE PAYE DEDUCTIONS OVER-ESTIMATED  

221YDB(1)   [Income under-estimated]  

Where both of the following conditions are satisfied in relation to a taxpayer and in relation to a year of income:


(a) either of the following conditions is satisfied:


(i) if the taxpayer is a section 221YAB taxpayer in relation to the year of income - the amount of the taxpayer's estimated taxable income is less than 85% of the amount of the taxpayer's taxable income;

(ii) in any other case - the amount of the taxpayer's estimated taxable income, reduced by the amount (if any) representing salary or wages that is included in that estimated taxable income, is less than 85% of the amount remaining after deducting from the taxpayer's taxable income the amount of any assessable income of the taxpayer that consists of salary or wages;


(b) the taxpayer is not liable to pay instalments of provisional tax in respect of the year of income;

the taxpayer is liable to pay, for each day in the period in subsection (1AAB), the general interest charge on the lesser of:


(c) the amount by which the tax payable in respect of the taxable income exceeds the amount of provisional tax payable in respect of the estimated taxable income; or


(d) the amount by which the provisional tax that would, apart from section 221YDA , be payable in respect of the taxable income exceeds the amount of provisional tax payable in respect of the estimated taxable income.

Note:

The general interest charge is worked out under Division 1 of Part IIA of the Taxation Administration Act 1953 .

221YDB(1AAA)   [PAYE deductions over-estimated]  

Where all of the following conditions are satisfied in relation to a taxpayer and in relation to a year of income:


(a) the taxpayer is a section 221YAB taxpayer in relation to the year of income;


(b) the taxpayer is not liable to pay instalments of provisional tax in respect of the year of income;


(c) the amount of the taxpayer's estimated taxable income is not less than 85% of the amount of the taxpayer's taxable income;


(d) the amount of the taxpayer's estimated PAYE deductions exceeds 115% of the amount of the deductions which have been made from the taxpayer's salary or wages during the year of income in accordance with sections 221C and 221D ;

the taxpayer is liable to pay, for each day in the period in subsection (1AAB), the general interest charge on whichever of the following is the least:


(e) the amount by which the amount of deductions made from the taxpayer's salary or wages during the year of income in accordance with sections 221C and 221D is less than whichever is the lesser of the following amounts:


(i) the estimated PAYE deductions;

(ii) so much of the amount of the estimated PAYE deductions as is estimated by the Commissioner, under paragraph 221YDA(2)(b) , to represent deductions that have been, and will be, made in accordance with sections 221C and 221D ;


(f) the amount by which the tax payable in respect of the taxable income exceeds the amount of provisional tax payable in respect of the estimated taxable income;


(g) the amount by which the provisional tax that would, apart from section 221YDA , be payable in respect of the taxable income exceeds the amount of provisional tax payable in respect of the estimated taxable income.

Note:

The general interest charge is worked out under Division 1 of Part IIA of the Taxation Administration Act 1953 .

221YDB(1AAB)   [Liability for certain days]  

A taxpayer that is liable to pay the general interest charge under subsection (1) or (1AAA) is liable to pay the charge for each day in the period that:


(a) started at the beginning of the day by which the provisional tax payable in respect of the estimated taxable income was due to be paid; and


(b) finishes at the end of the day by which the tax payable in respect of the taxable income is due to be paid.

221YDB(1A)   [Tax payable; provisional tax payable]  

In the application of subsection (1) or (1AAA):


(a) (Omitted by No 73 of 1989)


(b) the references in paragraph (1)(c) and (1AAA)(f) to the amount of the provisional tax payable in respect of the estimated taxable income shall, in the case of a taxpayer whose income of the year of income includes reportable payments, salary or wages, or prescribed payments, be read as a reference to an amount equal to the sum of that provisional tax and:


(i) if the income of the taxpayer of the year of income includes reportable payments - the amount of any deductions made from those payments under Division 1AA ; and

(ii) if the income of the taxpayer of the year of income includes salary or wages - the amount of any deductions made from that salary or wages under sections 221C and 221D ; and

(iii) if the income of the taxpayer of the year of income includes prescribed payments - the amount of any deductions made from those payments under Division 3A .

221YDB(1AA)   [Insufficient provisional tax instalment]  

Where:


(a) an instalment of provisional tax for a year of income (in this subsection referred to as the ``insufficient instalment'' ) was calculated by reference to:


(i) the amount of the taxpayer's estimated taxable income for the year of income as shown in an instalment estimate; or

(ii) an application of subsection 221YDA(4) in relation to the taxpayer's estimated taxable income for the year of income as shown in an instalment estimate; and


(b) either of the following conditions is satisfied:


(i) if the taxpayer is a section 221YAB taxpayer in relation to the year of income - the amount of the taxpayer's estimated taxable income is less than 85% of the amount of the taxpayer's taxable income;

(ii) in any other case - the amount of the taxpayer's estimated taxable income, reduced by the amount (if any) representing salary or wages that is included in that estimated taxable income, is less than 85% of the amount remaining after deducting from the taxpayer's taxable income the amount of any assessable income of the taxpayer that consists of salary or wages;

the taxpayer is liable to pay, for each day in the GIC period, the general interest charge on the amount by which the insufficient instalment is less than the amount ascertained in accordance with the formula


AB   -   C,

where:

A is:

  • (c) the amount that would have been the applicable provisional tax amount in relation to the insufficient instalment if no instalment estimate had been furnished by the taxpayer in respect of the year of income; or
  • (d) the amount of tax payable by the taxpayer in respect of the taxable income of the year of income reduced by the sum of the following amounts:
  • (i) if the income of the taxpayer of the year of income includes reportable payments - the amount of any deductions made from those payments under Division 1AA ;
  • (ii) if the income of the taxpayer of the year of income includes salary or wages - the amount of any deductions made from that salary or wages under sections 221C and 221D ;
  • (iii) if the income of the taxpayer of the year of income includes prescribed payments - the amount of any deductions made from those payments under Division 3A ;
  • whichever is the less;

    B is the relevant percentage; and

    C is the amount of any previous instalments of provisional tax for the year of income.

    Note:

    The general interest charge is worked out under Division 1 of Part IIA of the Taxation Administration Act 1953 .

    221YDB(1ABA)   [General interest charge re penalty period]  

    Where all of the following conditions are satisfied in relation to a taxpayer and in relation to a year of income:


    (a) the taxpayer is a section 221YAB taxpayer in relation to the year of income;


    (b) an instalment of provisional tax for the year of income was calculated by reference to:


    (i) the amount of the taxpayer's estimated taxable income for the year of income as shown in an instalment estimate; or

    (ii) an application of subsection 221YDA(4) in relation to the taxpayer's estimated taxable income for the year of income as shown in an instalment estimate;


    (c) the taxpayer's estimated taxable income is not less than 85% of the taxpayer's taxable income;


    (d) the amount of the taxpayer's estimated PAYE deductions, as shown in the instalment estimate, exceeds 115% of the amount of the deductions which have been made from the taxpayer's salary or wages during the year of income in accordance with sections 221C and 221D ;

    the taxpayer is liable to pay, for each day in the GIC period, the general interest charge on whichever is the lesser of the following amounts:


    (e) the amount by which the instalment is less than the amount that would have been the amount of the instalment if:


    (i) the estimated PAYE deductions had been equal to the amount of the deductions which were made from the taxpayer's salary or wages during that year of income in accordance with sections 221C and 221D ; and

    (ii) the Commissioner had accepted that estimate for the purposes of paragraph 221YDA(2)(b) ; and

    (iii) subsection 221YDA(4) had not applied;


    (f) the amount by which the instalment is less than the amount calculated using the formula:

    Graphic


    where:
  • `` Relevant amount '' means the lesser of:
  • (i) the amount that would have been the applicable provisional tax amount in relation to the instalment if no instalment estimate had been furnished by the taxpayer in respect of the year of income; or
  • (ii) the amount of tax payable by the taxpayer in respect of the taxable income of the year of income reduced by the sum of the following amounts:
  • (A) if the income of the taxpayer of the year of income includes reportable payments - the amount of any deductions made from those payments under Division 1AA ;
  • (B) if the income of the taxpayer of the year of income includes salary or wages - the amount of any deductions made from that salary or wages under sections 221C and 221D ;
  • (C) if the income of the taxpayer of the year of income includes prescribed payments - the amount of any deductions made from those payments under Division 3A ;
  • `` Relevant percentage '' means the relevant percentage;
  • `` Previous instalments '' means the amount of any previous instalments of provisional tax for the year of income.
    Note:

    The general interest charge is worked out under Division 1 of Part IIA of the Taxation Administration Act 1953 .

  • 221YDB(1AB)  
    (Repealed by No 11 of 1999)

    221YDB(1AC)   [Due date of increased instalment]  

    For the purposes of subsection (1AA) or (1ABA), where the amount of an instalment of provisional tax is increased under subsection 221YCA(3) or (4) or by reason of the operation of subsection 221YDA(4) , the whole of that instalment shall be deemed to have become due and payable on the day on which it would have been due and payable if it had not been increased.

    221YDB(1B)  
    (Repealed by No 11 of 1999)

    221YDB(1C)  
    (Repealed by No 11 of 1999)

    221YDB(2)   [Amount of charge is additional tax]  

    The amount of the general interest charge payable under subsection (1), (1AAA), (1AA) or (1ABA) is taken to be additional tax payable under this section.

    221YDB(3)   [Liability to general interest charge]  

    If any of the additional tax payable under this section remains unpaid after the last day for which it is payable, the taxpayer is liable to pay the general interest charge on the unpaid additional tax for each day in the period that:


    (a) started at the beginning of the next day; and


    (b) finishes at the end of the last day on which, at the end of the day, any of the following remains unpaid:


    (i) the additional tax;

    (ii) general interest charge on any of the additional tax.
    Note:

    The general interest charge is worked out under Division 1 of Part IIA of the Taxation Administration Act 1953 .

    221YDB(4)  
    (Repealed by No 11 of 1999)


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